Stylistically, Paul Ryan’s Republican convention speech last night was a grand slam. …But was it the growth message that supply-siders wanted to hear, or debt-clock obsession? There were clearly apocalyptic claims. “Before the math and the momentum overwhelm us all, we are going to solve this nation’s economic problems,” said Mr. Ryan in reference to the federal rea ink. “I’m going to level with you; we don’t have that much time.” …In fact, he talked about turning around the economy with “tax fairness.” Ugh, that’s an Obama term. …Larry Kudlow of CNBC and a former Reagan economist tells me, “Paul’s speech just didn’t have the growth, tax-cutting message. We didn’t even get the words tax reform. I don’t know what happened, but it worries me.” It’s a question of priorities. Are Mitt Romney and Paul Ryan signaling that they will put spending cuts ahead of pro-growth tax-rate cuts?

As a general rule, it is always good to do spending cuts (however defined). And it is always good to lower tax rates. And if you can do both at the same time, even better.

But since I have low expectations, I’ll be delighted if we “merely” manage to get entitlement reform during a Romney-Ryan Administration. That would mean some progress on the spending side and presumably reduce the risk of bad things (like a VAT!) on the revenue side.

But whenever I begin to feel sorry for myself, I remind myself of how bad things could be if I lived in the United Kingdom.

The burden of government spending in the U.K. rose from 36.5 percent of economic output in 2000 up to 48.7 percent of GDP today. This mostly happened under Labor Party rule, but the coalition of so-called Conservatives and Liberal Democrats that took power in 2010 hasn’t done much to restrain government spending.

To augment the damage, taxes also have been increasing. The feckless Gordon Brown of the Labor Party boosted the top tax rate to 50 percent (a disaster from a Laffer-Curve perspective) before getting evicted by voters.

And now the leader of the Lib Dems, Nick Clegg, is proposing a wealth tax. He says it will be a temporary measure until the fiscal emergency ends, but I would be shocked if politicians changed its mind after getting their hands on a new source of revenue (just look, for instance, how British politicians went crazy after first imposing an airline ticket tax).

…from what can be gleaned, the Deputy Prime Minister seemed to be suggesting a one-off or short term tax hike rather than a permanent change in the way the wealthiest are taxed. He described it as a “time limited contribution” to the “national effort” – since it was becoming clear, he said, that the country was embarked not on a “short economic battle” but a “longer economic war”. Mr Clegg said it would be “people of considerable wealth” who would be asked to make such a contribution.

It doesn’t appear that this plan will get the necessary support from the Tories, but it’s remarkable that it has been proposed. Like the death tax, the wealth tax is a turbo-charged form of double taxation.

P.P.S. This post is describing the current dismal fiscal situation, but the title references “a miserable and hopeless fiscal outlook.” That’s because I see no hope of good fiscal policy in the remaining years of the current government, and I suspect the statist failures of the Tory-Lib Dem coalition government will pave the way for a new Labor Party government. Needless to say, that will be – at best – jumping from one frying pan to another. Incidentally, I’m also worried about the United States for the same reason.

All federal spending should be reviewed to ensure powers reserved for the states are not given to the federal government, according to the GOP platform approved Tuesday. The platform language is meant to ensure all federal spending meets the requirements of the 10th amendment, which prohibits state powers from being given to the feds. “We support the review and examination of all federal agencies to eliminate wasteful spending, operational inefficiencies, or abuse of power to determine whether they are performing functions that are better performed by the States,” the platform reads. “These functions, as appropriate, should be returned to the States in accordance with the Tenth Amendment of the United States Constitution.”

For those of you who don’t have your Cato Institute pocket Constitutions handy, here’s what the 10th Amendment says.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

That’s the good news. The bad news is that the Republican platform will have less impact on a potential Romney presidency than this blog. In other words, Republicans don’t intend to live up to this promise. Heck, they don’t even know that they have such a position. That’s why I included the asterisk in the title and must draw your attention to this fine print.

*Offer not good when GOP holds power.

But I suppose it’s good that they included this language in the platform, even if it’s merely empty political rhetoric

More big U.S. companies are reincorporating abroad despite a 2004 federal law that sought to curb the practice. One big reason: Taxes. Companies cite various reasons for moving, including expanding their operations and their geographic reach. But tax bills remain a primary concern. … Aon plc…relocated to the U.K. in April. Aon has told analysts it expects to reduce its tax rate, which averaged 28% over the past five years, by five percentage points over time, which could boost profits by about $100 million annually. Since 2009, at least 10 U.S. public companies have moved their incorporation address abroad or announced plans to do so, including six in the last year or so, according to a Wall Street Journal analysis of company filings and statements. …Eaton, a 101-year-old Cleveland-based maker of components and electrical equipment, announced in May that it would acquire Cooper Industries PLC, another electrical-equipment maker that had moved to Bermuda in 2002 and then to Ireland in 2009. It plans to maintain factories, offices and other operations in the U.S. while moving its place of incorporation—for now—to the office of an Irish law firm in downtown Dublin. …Eaton’s chief executive, Alexander Cutler, has been a vocal critic of the corporate tax code. “We have too high a domestic rate and we have a thoroughly uncompetitive international tax regime,” Mr. Cutler said on CNBC in January. …In moving from Dallas to the U.K. in 2009, Ensco followed rivals such as Transocean Ltd., Noble Corp. and Weatherford International Ltd. that had relocated outside the U.S. The company said the move would help it achieve “a tax rate comparable to that of some of Ensco’s global competitors.”

Wow. I can understand moving to Ireland, with its 12.5 percent corporate tax rate, but I wouldn’t have thought that the U.K.’s 24 percent rate was overly attractive.

But compared to the punitive 35 percent rate in the United States, I guess 24 percent doesn’t look that bad.

So what’s the solution? The obvious answer is to lower the corporate tax rate. But it also would help to eliminate worldwide taxation, as noted in the article.

Lawmakers of both parties have said the U.S. corporate tax code needs a rewrite and they are aiming to try next year. One shared source of concern is the top corporate tax rate of 35%—the highest among developed economies. By comparison, Ireland’s rate is 12.5%. …Critics of the tax code also say it puts U.S. companies at a disadvantage because it taxes their profits earned abroad. Most developed countries tax only domestic earnings. While executives would welcome a lower tax rate and an end to global taxation, some worry their tax bills could rise under other measures that could be included in a tax-overhaul package.

Both Obama and Romney have said that they favor a slightly lower corporate rate, but I’m skeptical about their true intentions. In any event, neither one of them is talking about a low rate, perhaps 15 percent of below.

Let’s close by noting that there are two obstacles to pro-growth reform. First, any good reform will deprive politicians of tax revenue. And since they’ve spent the country into a fiscal ditch, that makes it very difficult to enact legislation that – at least on paper – means less money flowing to Washington.

Second, politicians are very reluctant to lower tax rates on groups that can be demagogued, such as “rich people” and “big corporations.” This is the destructive mentality that drives class-warfare tax policy.

So America faces a choice. Jobs, investment, and growth or big government, class warfare, and stagnation. The solution should be obvious…unless you’re a politicians interested in preserving power in Washington.

The left has been loudly asserting that the middle class would lose under Mitt Romney’s plan to cut tax rates by 20 percent and finance those reductions by closing loopholes.

That class-warfare accusation struck me as a bit sketchy because when I looked at the data a couple of years ago, I put together this chart showing that rich people, on average, enjoyed deductions that were seven times as large as the deductions of middle-income taxpayers.

And the chart includes only the big itemized deductions. There are dozens of other special tax preferences, as shown in this depressing image, and you can be sure that rich people are far more likely to have the lawyers, lobbyists, and accountants needed to exploit those provisions.

The IRS data show that taxpayers with adjusted gross incomes over $100,000 (the top 21% of all taxpayers) made itemized deductions totaling $636 billion in 2009. Those high-income taxpayers paid marginal tax rates of 25% to 35%, with most $200,000-plus earners paying marginal rates of 33% or 35%. And what do we get when we apply a 30% marginal tax rate to the $636 billion in itemized deductions? Extra revenue of $191 billion—more than enough to offset the revenue losses from the individual income tax cuts proposed by Gov. Romney. …Additional revenue could be raised from high-income taxpayers by limiting the use of the “preferences” identified for the Alternative Minimum Tax (such as excess oil depletion allowances) or the broader list of all official individual “tax expenditures” (such as tax credits for energy efficiency improvements in homes), among other credits and exclusions. None of this base-broadening would require taxing capital gains or making other changes that would reduce the incentives for saving and investment. …Since broadening the tax base would produce enough revenue to pay for cutting everyone’s tax rates, it is clear that the proposed Romney cuts wouldn’t require any middle-class tax increase, nor would they produce a net windfall for high-income taxpayers. The Tax Policy Center and others are wrong to claim otherwise.

In other words, even with a very modest assumption about the Laffer Curve, it would be quite possible to implement something akin to what Romney’s proposing and not “lose” tax revenue.

Jacques Wajsfelner of Weston, Massachusetts is a criminal mastermind. Big time. Like Lex Luthor. But rest easy, ladies and gentlemen, for this nefarious villain is about to face some serious jail time thanks to the courageous work of US government agents. You see, Mr. Wajsfelner was finally caught and convicted of a most heinous crime: failing to disclose his foreign bank account to the US government. Note– he was not convicted of tax evasion. He was not convicted of failing to file or pay taxes. His crime was not filing the annual Report of Foreign Bank and Financial Accounts (FBAR). Because of his failure to disclose his foreign bank account, Wajsfelner is now looking at FIVE YEARS behind bars in a Day-Glo orange jumpsuit. Oh, one more thing– Wajsfelner is 83 years old. He was born in Germany during the global depression and rise of Adolf Hitler. The Wajsfelner family soon fled the Nazi regime and made its way to the United States.

Please note that Mr. Wajsfelner didn’t get convicted of not paying tax. He got convicted for the utterly trivial and victimless “crime” of not reporting a foreign bank account.

So the government is sending a completely harmless old man to jail for something that shouldn’t be illegal (and if we had a flat tax, there would be no double taxation of saving and investment, so it wouldn’t matter for tax purposes if your bank account was in Georgetown, Kentucky, or Georgetown, Cayman Islands).

Now let’s compare the treatment of Mr. Wajsfelner with the way some real criminals are treated.

Then there’s Eric Higgins of Port Huron, Michigan, who was recently busted for major possession of child pornography and engaging in sexually explicit conversations with juveniles online. He was given 20 months. Oh… and Mr. Higgins was a US Customs & Border Patrol agent. …Or Ricardo Cordero, another US Customs & Border Patrol officer who was given 27-months for personally smuggling 30 Mexican nationals into the United States, and assisting another smuggler to bring 15 Mexican nationals across the border. This genius even had the smuggler testify as a character witness at his divorce proceeding! Or Jon Corzine, former CEO of Goldman Sachs and member of the political elite, who presided over one of the largest plunders in the financial system ever seen during the recent MF Global collapse. He walks the streets freely to this day.

The article closes with a very accurate – but understated – assessment of the federal government.

It seems pretty clear where the US government stands: the victimless crime of failing to report a foreign bank account is far more egregious than, say, possession of child pornography, engaging with minors in online sex chat, bribery, extortion, fraud, and abuse of official power.

Every one of the government officials involved in these episodes should be fired. And they should consider themselves lucky that tar and feathers are no longer a method of dealing with despicable bureaucrats.

P.P.P.S. The government’s grotesque treatment of Mr. Wajsfelner is part of the overall attack on tax competition. Heaven forbid people have the freedom to benefit from better tax policy in other jurisdictions!